Plans for a London Grand Prix were given a huge booston Thursday, as the prospect of Formula One cars racing along The Mall and past Buckingham Palace moved a step closer to reality thanks to Government proposals.

Jenson Button said he believed the “dream” of a race through the streets of the capital could now be realised, in what many in the sport believe would trump even Monaco for spectacle, becoming the jewel in Formula One’s crown.

The sport’s supremo, Bernie Ecclestone, threw his weight behind designs released nearly two years ago for a 14-corner circuit, which would incorporate landmarks including Big Ben and Trafalgar Square.

The 83-year-old said the idea was “no joke”, promising it would be “better than the Olympics”, as he even suggested putting the money up for staging the £35 million event.

Although there are numerous logistical issues to contend with, a major legal problem was potentially removed yesterday, as the government announced a consultation on closed-road motorsport events on mainland Britain. It could pave the way for a race in the capital, as well as the staging of rallies, sprints and hill climbs across the country.

Button, who fronted the campaign for a London race with his then McLaren team-mate Lewis Hamilton in 2012, said yesterday that “the dream has taken a step closer”.

“When I first saw the plans for a London Grand Prix I knew they were ambitious, but fantastic,” Button said.

“The thought of a race through the capital’s streets was only a dream when they initiated the project, but this week’s changes to the law bring the idea a step closer to reality.

“You could create such a unique grand prix through the streets of London – the roads are naturally very wide and long, so straightline speeds would be high, and you could create a real blend of corners.”

Meanwhile, on the first day of the final pre-season test in Bahrain Red Bull’s woes continued, as after what had been a promising morning, Daniel Ricciardo managed just a handful of laps in the afternoon.

Ominously for the world champions, Red Bull’s senior adviser Dr Helmut Marko warned they face problems for the first race in Australia, in just over two weeks’ time, and beyond.

He was also severe in his criticism of their engine supplier, Renault, as he added that four-time champion Sebastian Vettel was “not amused” by the current crisis.